Based on the following selected data, journalize the adjusting entries as of Dec

Question

Based on the following selected data, journalize the adjusting entries as of December 31 of the current year: a. Estimated uncollectible accounts at December 31, $11,520, based on an aging of accounts receivable. The balance of Allowance for Doubtful Accounts at December 31 was $1,200 (debit). b. The physical inventory on December 31, indicated an inventory shrinkage of $2,360. c. Prepaid insurance expired during the year, $16,300 d. Office Supplies used during the year, $2,800. e. Depreciation is computed as follows: Asset: Building Cost: $650,000 Residual Value: $0 Acquisition Date: Jan 2. Useful Life in Years: 50 Depreciation Method: Double-declining-balance Asset: Office Equipment Cost: $176,000 Residual Value: $16,000 Acquisition Date: Jan 3. Useful Life in Years: 5 Depreciation Method: Straight Line Asset: Store Equipment Cost: $80,000 Residual Value: $8,000 Acquisition Date: July 1. Useful Life in Years: 10 Depreciation Method: Straight Line f. A patent costing $36,000 when acquired on January 2 has a remaining legal life of eight years and is expected to have value for six years. g. The cost of mineral rights was $390,000. Of the estimated deposit of 650,000 tons of ore, 38,400 tons were mined and sold during the year. h. Vacation pay expense for December, $7,500 i. A product warranty was granted beginning December 1 and covering a one-year period. The estimated cost is 3% of sales, which totaled $1,350,000 in December j. Interest was accrued on the note receivable received on October 17 I want to make sure my adjusting entries are correct! Thanks!

Explanation / Answer

(c). Checks outstanding at December 31, $30,600. Subtract from bank statement No journal entry needed (d). Deposit in transit, not recorded by bank, $13,200 Add to bank statement No journal entry needed (e). Bank debit memo for service charges, $350. Subtract from ledger Dr Bank Fees 350 Cr Cash 350 (f). A check for $530 in payment of an invoice was incorrectly recorded in the accounts as $230. Subtract 300 from ledger Dr Accounts Payable 300 Cr Cash 300 3. Based on the bank reconciliation prepared in (2), journalize the entry or entries to be made. See above 4. Based on the following selected data, journalize the adjusting entries as of December 31 of the current year: (a). Estimated uncollectible accounts at Dec. 31, $7,200, based on an aging of accounts receivable. The balance of Allowance for Doubtful Accounts of Dec. 31 was $750 (debit). Dr Bad Debt Expense 7,950 Cr Allowance for Doubtful Accounts 7,950 (b). The physical inventory on Dec. 31 indicated an inventory shrinkage of $1,480. Dr Inventory Short and Over 1,480 Cr Merchandise Inventory 1,480 (c). Prepaid insurance expired during the year, $10,200. Dr Insurance Expense 10,200 Cr Prepaid Insurance 10,200 (d). Office supplies used during the year, $1,760. Dr Supplies Expense 1,760 Cr Office Supplies 1,760

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